Once the preserve of prestigious fashion labels, high-end cosmetics have become more democratic in recent years with hitherto unknown niche and doctor brands enjoying success despite their high price tags
In today’s market it is hard to believe that when Estée Lauder launched Crème de la Mer at £120 for a 50ml jar just over a decade ago it caused a stir. Seen as the preserve of the rich and famous, the cream was famous for being outrageously expensive. Few believed that consumers would even sample it, let alone factor it into regular spending decisions. Now there are so many creams available at and above this price that while Crème de la Mer continues to enjoy its reputation as the original luxury cream, it can no longer be said that this luxury is exclusive to the very rich.
Defining super luxe
Exploring the parameters of the super luxe category presents some problems in terms of definition. First, what constitutes expensive for a single unit differs from sector to sector; a mascara or shampoo has a wildly different price point to a perfume in any bracket. Secondly it is worth recognising that luxury cannot be defined by price alone. “The consumer’s perception of luxury is no longer based on price, heritage or reputation but an intrinsic sense of worth,” says Jonathan Ford, creative partner at design consultancy Pearlfisher. Last, without separating out the uber luxe, the sky is the limit for the upper price boundaries in this category, with Clive Christian’s No1 fragrance packaged in a Baccarat bottle with a five carat diamond at the neck priced at £100,000. However, in the main, the super luxe category entails products that command a price of £100 (€146/$200) and above.
Although still small, this category has swelled considerably in the last 12 months. The addition of virtually every multinational prestige brand to the roll-call has transformed the category. “Basically, more and more brands are trading up and trying to create more tiers but we believe that this may come down to naming and perception and that there are no exact boundaries,” confirms Ford.
Because the super luxe category is still a niche sector within the cosmetics industry as a whole, and because its parameters are so hard to define, precise figures on the size or growth of the market are hard to come by. Mintel estimates that perfume and cosmetics accounted for 36.6% of the global luxury goods market in 2003, equating to €22.5bn, although the relative size of the super luxe category within this figure is not easily ascertainable.
Naturally the size of the market depends on the number of people that are equipped with the relevant budget to sustain it. Not surprising then that according to Euromonitor, the US, Japan and the UK are thought to be the most lucrative markets for luxury cosmetics. Sonia Almela at Natura Bissé adds that the Middle East, the US and Japan are the most successful markets: “These are big luxe markets. Perception is very important in these countries and customers want to buy high-end products,” she says.
However, the sheer number of players that have entered the market in the last 12 months begs the question as to how sustainable these launches can be. It is clear that the aspirational are helping to boost sales too. “Luxury is something that is not a necessity but makes our lives better; it shows that you live an aspirational lifestyle. Super luxe products invite you into a world of beautiful things. People always desire to be in this situation,” says Almela.
Any discussion on the emergence of the super luxe category therefore has to consider why consumers are suddenly willing to fork out more for their cosmetics. Several social factors have contributed to this rapid tolerance of increasingly extortionate price tags: the rise of the dinkies (double income, no kids) at one end of the reproductive scale is balanced at the other end by baby boomers who have paid off the mortgage and whose kids have flown the nest, creating a larger than ever audience of avid consumers with disposable income.
Consumers are not only spending more, but also spending wiser, and discounters are growing in popularity - Primark and Lidl are regularly visited by the savvy wealthy. Inevitably marketers have come up with the term ‘Pravs’ (a cross between Prada and chav) to describe this new wave of consumers who shop according to their own agendas. “We live and buy in a more modal way. As ever more self-actualised, brand savvy consumers in highly developed markets we are willing to make choices without peer approval,” comments Ford.
In the context of the cosmetics industry there are some unique factors that have contributed to this jump. “Super luxe has come about as a result of mass products becoming more expensive. Now that some mass brands are selling skus at around £20 apiece, the segment is becoming less easily defined and this has resulted in the traditional prestige brands seeking a way to set themselves apart and re-establish their cachet by moving into the super luxe bracket,” says Claire Briney, senior account manager at Euromonitor.
The ageing population in the developed world has put a premium on youth; while the number of millionaires is growing each year, the number of under 25s is steadily shrinking.
Accordingly, there is apparently no limit to what customers will pay to keep the years from showing. “There is a niche market for super luxe products for women who can afford to buy them and who would be willing to do anything to fight against the appearing of wrinkles,” notes Nadiyah Athar, assistant brand manager, Nivea Visage at Beiersdorf.
Skin care is therefore considered the most lucrative cosmetic sector for the super luxe manufacturer. “Anti-ageing has the most scope for the super luxe category; ageing is a luxury concern. To treat sensitive skin is necessary, whereas anti-ageing is preventative and this makes it a luxury rather than a necessity,” says Almela.
Doctor on call
In the skin care arena the growing acceptance of plastic surgery has heralded the arrival of popular doctor brands. Perhaps this new popularity has arisen because with a minimum spend of £2000 for a surgical procedure, £200 for a cream looks cheap in comparison. “A £100 price tag will never appear cheap, but the top-end treatments and surgical procedures have certainly put expensive creams into perspective,” says Briney. Nicky Kinnaird, founder and creative director at Space NK disagrees: “The success of the super luxe products is comparative against the performance of previous products.”
In which case, at £370 for 30ml, the most expensive sku for RéVive, a skin care line sold in Space NK and created by American plastic surgeon Dr Gregory Bays, looks set to become a miracle product. RéVive Intensité Volume Serum promises to impart a more dewy texture to skin in eight days and is described as the optimum solution before considering a surgical procedure thanks to active ingredient KGF - Keratinocyte Growth Factor. The cream is said to enhance epidermal regeneration, making it work four times faster, while preventing DNA fragmentation. RéVive Blanche is the latest in the line-up, commanding £320 for 30ml.
Dr Brandt Skincare is another brand to enter the skin care market at the super luxe level. Crease Release with GABA complex costs £110 for 30ml and is said to be a topical alternative to Botox. GABA (gamma amino butyric acid) is said to lower tension in the muscle, causing a smoothing effect.
Conventional wisdom
And it is not just doctor brands that have got in on the act - several of the big names have taken the leap into super luxe. L’Oréal’s Lancôme brought out two such creams, Secret de Vie at €200 and Platinéum, while Guerlain’s Orchidée Impériale Exceptional Complete Care Cream weighed in at €300. Estée Lauder’s Re-Nutriv day and night duo played the trump card at £450 for the pair.
Carita chose May to launch Progressif Anti-Age Pearl of Youth, a new anti-ageing range that claims to help restore balance to mature skin. The three products are priced at £106 each and contain white pearl powder, which is said to improve the skin’s metabolism thanks to its high calcium content and to provide the skin with amino acids derived from conchiolin, the organic substance of the pearl.
The brand also took its body care offering up a peg with La Crème Parfaite, said to target hormonal and chronological ageing with firming ingredients such as Japanese mushroom, and draining caffeine and Centella asiatica. Particles of 24 carat gold are suspended in the cream and are said to glide over imperfections.
The established niche brands do not appear to be suffering from this competition. Chantecaille showed its hand with Biodynamic Lifting Cream, said to rejuvenate the skin at the cellular level for £240 for 50ml. As Kinnaird affirms, the success of each product must ultimately depend on results. “Quality and value for money at whatever price point are the key,” she says. “Success is dependent on the quality and performance of a product, which will govern repeat purchases by the consumer.”
Natura Bissé, the Barcelona-based skin care company, for example, recently added to its Diamond skin care range. In March the company brought out Diamond Extreme, a rich cream promising to deliver extreme cellular energy, regeneration, protection and reconstruction. The secret, says the company, lies in its Epidermal Lipid Supplement, which is said to nourish the skin through a series of skin-identical lipids in amaretto oil, mango butter and shea butter. The cream retails at £200 and is subject to limited distribution worldwide, including Neiman Marcus in the US, Mitsukoshi in Japan and the Urban Retreat spa and perfumery in Harrods, London.
Smells expensive
The fragrance industry has always enjoyed a luxury reputation. Jean-Charles Brosseau’s classic scent Ombre Rose has been going strong for 20 years and at 16 times the price of Chanel No5 (£164 for the 30ml perfume) certainly remains a luxury scent. The oriental floral has recently been repackaged to maximise its impact on shelf. “This is an example of a legitimate brand, owned by people who care about quality and refinement, and that is why it is so successful,” explains Roja Dove, Professeur des Parfums.
However, there is currently evidence of a certain consumer ennui, thought to be caused by continual launches of seasonal variations of the same old fragrances and heavyweight, over-targeted marketing campaigns. A crop of niche fragrances is gaining in popularity for their ability to offer the consumer something more original. “Today’s new luxury is actually a slow luxury, which means an appreciation on a smaller scale, the limited edition, a return to slow craft, as evidenced in the successful small and niche brands,” says Ford.
Lalique, for example, went out on a limb with its latest scent, opposing market trends by creating a chypre. Perles de Lalique is built around notes of Bulgarian rose, bourbon black pepper, oak moss, patchouli, vertiver and orris and is available in a 30ml crystal perfume flacon for £280, while the glass alternative is £34 for a 50ml spray.
“The problem with our industry is that it has played safe for too long and in doing so in the eyes of the consumer it has become debased,” argues Dove. “However, the industry’s strength is to constantly reinvent itself and that is what is happening at the moment. Thus we are seeing the emergence of limited edition fragrances from Dior, Hermès and Armani - such as the Privé collection - which are interesting because they have dared to break free from the usual retail outlets and become very selective. These are three perfume houses that have started a change in approach which has allowed perfumers to use better quality materials and be more creative.”
Now that traditional luxury brands are sold in pharmacy chains, while Garnier and Nivea are lined up in department stores, there is little distinction between the traditional purveyors of luxury and the mass channels. Even supermarkets now stock fragrances by top designer names. “There is a real need for prestige brands to retain their value by creating an aura of mystique. There is so much blurring between the categories now that distribution has a very important role to play in a brand’s image. Price is no longer the only factor that sets a brand apart,” says Briney. Almela agrees. “I think that luxe involves exclusivity - it shouldn’t be mass market. It changes the perception of a brand and can devalue the brand image,” she says. “For example, a lot of luxury fashion labels are moving away from heavily logoed, obvious items again. The luxe customer wants exclusivity and not to be mainstream.”
Restricted access
The answer lies in the burgeoning success of niche perfumery chains and independent perfumeries such as Space NK, Jo Malone and Les Scenteurs and new niche perfumery areas within department stores, which all thrive on the promise of luxury and exclusivity. Le Forêt in Harvey Nichols and Urban Retreat in Harrods are two examples of how brands that focus less on availability and more on luxury can thrive in the right environment. “What we have perceived as luxury brands in the past are no longer that, they are just expensive. This new luxury lies in a greater creativity, where niche brands such as Lalique are able to take a greater creative risk and thus create products that have a true intrinsic value. The price is not inflated by marketing campaigns, but on the basis of expensive ingredients,” says Dove.
Although skin care and fragrances form the lion’s share of the super luxe category, the desire for luxury has become so pervasive that more unlikely sectors are also branching out into super luxe treatments.
In the hair care arena Frédéric Fekkai has created Overnight Hair Repair, a £135 treatment that has borrowed Repair Patch Technology from skin care and claims to repair damaged hair and protect it from future damage without leaving a residue.
Meanwhile, under the home fragrance banner Jo Malone has added a new meaning to the term ‘burning money’. Her latest creation, the Luxury Fragrance Combining Candle, features a blend of scents designed to capture the essence of an English garden - Orange Blossom, Tigerlily and Wild Fig and Cassis - and is selling at £160.
In the lap of luxury
While it should remain clear that the super luxe category is a relatively small sector of the cosmetics industry as a whole, and that its value and growth are difficult to track in the absence of a precise definition of what the sector entails, it is also clear that the number of brands breaking through the prestige price barrier has had a knock-on effect on other categories. “This rise, albeit a marginal one, is nevertheless significant and does herald the advent and potential success of a new type of luxury brand, which may not be jostling with the established brands for room at the top but could well develop and take the luxury marketplace in a new direction and set new luxury parameters,” says Ford. And it is in this context that the movement becomes all the more important to the market as a whole. Although there is perhaps a chicken and egg situation between the super luxe and the mass market price hikes, the knock-on effect of a tolerance for high prices at either end of the scale could be that higher prices will also become acceptable along the entire chain.
However, there’s a word of warning from Dove: “The risk in this sector is that companies will cynically see an opportunity to sell a product at a higher price point without investing in the product itself, which is what gives more expensive products their legitimacy. It would be very sad if the hard work of more creative companies was spoilt by the greed of others.”
Whether the super luxe category has any staying power is dependent on the financial circumstances of the consumers who buy them. “There is very good growth and prospects for the future. The luxury market is related to the stock market - they rise and fall together,” says Almela.